Do you have to pay taxes on merit scholarship/grant?

^Not quite. The following statements are correct:
If you add Outside scholarship, University Grant that’s total of $25K and my tuition itself is $30K… So it seems you won’t owe any taxes on Scholarship/grants (25k < 30k), but your parents may still eligible for AOC (30k - 25k = 5k.)

Federal work study is not scholarship and you always receive a W-2!